Making Tax Digital Explained
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Under Making Tax Digital, affected sole traders must send quarterly updates to HMRC during the tax year. These updates summarise income and expenses for each quarter. After the tax year ends, a final submission is made to confirm the yearly figures and include any adjustments.
The final submission deadline is expected to remain aligned with the usual Self-Assessment deadline: 31 January after the end of the tax year.
Good record-keeping throughout the year makes these deadlines much easier to manage.
Common misconception
Not true.
Quarterly updates are only summaries of income and expenses, not final tax calculations.
Keep your records up to date each quarter, then confirm and adjust the final figures at year-end.
Making Tax Digital introduces regular reporting deadlines, but the final tax position is confirmed at year-end.
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